Thursday, May 21, 2009

Not Budgeting Enough Can Be Costly

Throughout the course of our frugal living, we have had our share of flops - meals that no one would eat, sewing projects that ended up being a waste of time and materials, expenses that could have been avoided with better organization, and on and on. Would you expect any less from the woman who spent $17 on 6 chocolate-covered pretzel rods?

But there is one flop that always sticks out in my mind. It was a huge learning experience for me and something that I struggled against changing, because I knew I could make it work if I just tried harder. That flop was under-budgeting.

See, I used to make the mistake of thinking I was only frugal if I spent next to nothing all the time. I believed my success in frugality was directly tied to how much less I spent month after month. So I budgeted that way, constantly shaving dollars off here and there throughout our budget.

However, I wasn't being realistic and that ended up costing us a lot more money each month. I felt a false pride in spending only $200 per month on groceries. And I turned a blind eye on all those little trips to the grocery store to just pick up one or two items because we were out of food. We were probably spending over $400 a month on groceries, but my budget of $200 was set in stone, so obviously I was winning at this frugal thing.

Eventually, Eric pointed out to me that these little trips were really adding up. I realized he was right, but I fought against changing my budget. After all, wouldn't that knock me off this frugal pedestal I was on? I redoubled my efforts and worked every angle possible in an attempt to keep our budget at $200.

Then one day, I just gave up. I don't remember what the specific incidence was that set me off, but I know it was something big. My eyes finally opened and I realized my claimed budget was a joke. And because I was so stuck in that pattern of disbelief, we were actually spending way more every month than necessary.

So Eric and I discussed the situation and agreed that upping our budget really made sense. I upped it $100 and started really relying on menu planning and monthly grocery shopping, just because that was worked best for me staying on task. Being realistic and dropping my pride taught me a huge lesson.

My dad used to have a list of quotes hanging in his office. One of them that has stayed with me throughout my life is - "Proper preparation prevents poor performance." I relate this to my frugality by thinking "proper preparation prevents poor pockets." Now that my budget is properly prepared, our wallets have seen the benefit.

Stop by Life As Mom for more Frugal Friday and Cents To Get Debt Free for more Finding Freedom Friday.


Jen - Balancing Beauty and Bedlam 10:19 PM  

I love this post. I am speaking tomorrow at our home school conference on frugal living and one of my points is being honest with your budget. It always looks good on paper, doesn't it? thanks for the excellent reminder. Now stop making me procrastinate. :)

Sue 11:38 PM  

Very wise advice Kate! I truly gain so much from your "frugal" ways!

More Love, Less Debt 12:45 AM  

I have never read your blog until now. I am very glad that I did. I feel the same that we really are wonderfully frugla when spending little to no money at all except what is debt. Thanks for the reminders and ideas. I am doing some but each and every additional thought and idea will help. Thanks!

FishMama 1:05 AM  

I hear ya, I hear ya. I do a little of that blind eye thing. And I just spent $28 on bulk candy for birthday cakes, so your reminder about the pretzel story made me feel better. Thanks!

Love the quote. Hubs just heard it at his new job last fall and it's become our theme song. I could have avoided the $28 on gummy snakes if I had been better prepared. Hmmm...

Dana 1:55 AM  

Yes, those little trips add up. Especially in fuel! We just tracked what we were spending before setting a budge. Funny thing is, when you categorize every stinkin' thing you buy, you think about it just a hair longer when purchasing.

And a lot of things get put back.

Jennifer 7:57 AM  

Those little trips always kill my budget too! I've found that making a very short list of just what's needed and sending my husband keeps our in-between trip totals much smaller. I'm more likely to find things that I didn't even know I wanted, and a few of those things always seem to end up my cart. He sticks to the list much more faithfully than I do. Great post!

Ali 8:14 AM  

I am so guilty of this. Thanks for sharing.

Stephanie 8:16 AM  

That is absolutely fantastic! I have also been so guilty of doing this very same thing. Budgeting is frugal but also being realistic is so necessary!

Thanks for this excellent post!

Donna(mom24boyz) 6:25 PM  

So true! We are a family of 6 --two of those are teen having a 50 budget a week was just not working. We now have a realistic budget of $150 a week. This includes and occaisional outing to mcdonalds or wendys...but now those trips dont upset me so much. I pull out $300 cash every two weeks and I stick to it! That feels good. Just sticking to that.

Hoosier Homemade 10:29 PM  

Great post! Thanks for sharing!

BarbaraLee 7:50 PM  

Budgets are made for adjustments. And some times you just have to play w/it for awhile to see what works for you. I too have to relook at ours. I am pretty good in the grocery area, $500 that includes supplies. But some things go up & down like the electric. So being realistic is a wise choice. Good luck.

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